Thread by @DanielAlpert

A 🧵 on the oh so crazy @CathieDWood and $ARKK.
1/n I bought into her top 10 wealth destroying actively managed ETF (Morningstar) this morning at $29.50 as an experiment.
One might think from the below chart that Cathie has been all hat and no cattle.
With huge hype from...

2/n (ex) Bloomberg's @Matthew_Winkler in 2020, ARKK hit nearly $140 a share and has lost nearly 80% of its then value.
Cathie was (is) selling a concept she calls "disruptive innovation" claiming that she can spot those with real disruptive technology and business models and...

3/n separate them from the 'fake it til you make it' crowd.
Very Schumpeterian of course, but Cathie packs a larger ideological bag as a disciple of Arthur Laffer, and is a still-avid supply sider and producerist -- long past the sell-by date for those theories.
Yet she has...

4/n been cited and celebrated relentlessly. ARKK once had nearly $30 billion in AUM and still has over $6 billion. And flows in and out of ARKK are still monitored by traders around the globe as a measure of the health of the tech sector.
Which leads me to why I gave crazy...

5/n Cathie a few thousand dollars of my money to "manage."

Clearly I am bottom fishing, no harm in that.

But I am also curious to see what Cathie does in this era of relentless unveiling of the 'disruptor' as snake oil sales(wo)man, as fraudster; a shampoo, rinse, repeat...

6/n cycle, not of one model working better than others (yielding Schumpeter's 'creative destruction'?) but of outright cons yielding Potemkin companies and make-believe trading schemes surpassing the bucket shops of a century ago.

Lessons were learned then, and forgotten...

7/n And folks like Cathie and her mentors led the charge into a repeat of what history taught us to beware of.
The result for many who bought into this mania was massive wealth destruction (very 'uncreative'), the magnitude of which is just hitting the global economy.
Not based..

8/n on one entrepreneur besting another with a superlative product, but with billions of investment in what often turned out to be nothing at all, or many more times far less than it had been chalked up to be.
This was Cathie's perfect expression of market fundamentalism?...

9/n I can't imagine so.
It was, however, the outcome of an extended period of excess, underutilized, underinvested (in the primary sense) capital seeking any kind of meaningful return and being entirely deprived of real returns in lower risk arenas for much of the century...

10/n That drove enormous flows into non-dividend growth stocks, private equity, venture capital and 'alternatives' (a polite name for things like cryptocurrencies).
The bloom is off the rose now, those swimming naked have been exposed.
So what will Cathie do with my money now? 👀

11/n I admit that my odds are not the best, it's a flyer.
This is the second time Cathie has been pummeled (the last being at AllianceBernstein during the #GFC).
And, let's face it, ARK Management was seeded by none other than the infamous Bill Hwang of Archegos...

END
But I'm curious to see: If stripped of the massive inflows, if chastised by the uncovering of the pile of meta-💩 that has become the industry in which she expressed so much faith, is there really a stock picker in this well connected woman?

Or maybe she was faking it, too.